Although most land in England and Wales is now registered, some unregistered land still exists. When dealing with unregistered land, there is no state-backed register to consult. Instead, title is proved by the title deeds -- a collection of documents showing the chain of ownership going back at least 15 years (the "root of title"). The rules governing unregistered land are different from those for registered land, and a purchaser must take greater care in investigating the title.
Unregistered land matters for the SQE because: (1) some land remains unregistered, (2) a question could involve land that becomes registered during the course of events, and (3) the rules of unregistered land (particularly the doctrine of notice and the Land Charges Act 1972) are tested as distinct topics. The SQE frequently tests your ability to distinguish between the registered and unregistered systems.
Title deeds are the documents that prove ownership of unregistered land. They include conveyances, transfers, wills, grants of probate, and other instruments that show how the current owner acquired the land. The title deeds must be kept safe because they are the only evidence of ownership. If the deeds are lost, the owner may need to apply for possessory registration.
The root of title is a good conveyance (usually a transfer or conveyance on sale) from which the current owner's title is derived. It must be at least 15 years old and must show an unbroken chain of ownership from the root to the current owner. The root of title is the starting point for deducing title. The vendor must produce a root of title and all subsequent documents to the purchaser.
Deducing title means showing the chain of ownership from the root of title to the current owner. The vendor must produce the root document and every subsequent deed, transfer, or other instrument that shows how the title has passed from the owner at the date of the root to the current vendor. If there is a gap in the chain (a "missing link"), the purchaser cannot be sure that the vendor owns the land and may refuse to proceed.
The epitome of title is a summary of all the title deeds, prepared by the vendor's solicitor. It lists each deed in chronological order and summarises its effect. The purchaser's solicitor uses the epitome as a starting point for investigating the title. It saves time because the purchaser does not have to read every deed from scratch, but the full deeds must still be available for inspection.
The Land Charges Act 1972 (LCA 1972) provides a system for registering certain interests in unregistered land. The purpose is to ensure that a purchaser of unregistered land can discover whether any third-party interests affect the land by carrying out a search at the Land Charges Registry. If a registrable land charge is not registered, it is void against a purchaser of a legal estate for money or money's worth. This is a strict rule with no exceptions.
A land charge shall be void against a purchaser of any interest in land to which the charge relates, or of any land charged, if the charge is not registered before the completion of the purchase or the creation of the interest. This means that failure to register a registrable land charge makes it completely unenforceable against a purchaser.
Land charges are registered against the name of the estate owner, not against the land itself. This is a fundamental difference from the registered land system, where interests are noted on the title register of the specific property. The fact that land charges are registered against names can cause problems: if the owner's name changes, the charge may not be found on a search. This is a well-known flaw in the system.
Because land charges are registered against the owner's name and not against the property, a purchaser must search against all possible names of the current and previous owners. If the owner has married, changed their name by deed poll, or used a different version of their name (e.g. "John Smith" vs "Jonathan Smith"), a search against the wrong name may miss a land charge. This is a serious defect in the system.
Section 2 of the LCA 1972 sets out the classes of land charge that are registrable against the estate owner's name. These include various types of equitable interest that would otherwise be difficult for a purchaser to discover. The most important classes for the SQE are Class C (various types of mortgage and charge) and Class D (estate contracts and restrictive covenants).
| Class | Description | Examples |
|---|---|---|
| Class A | Tax charges | Inheritance tax charges, corporation tax charges |
| Class B | General equitable charges not covered by other classes | Rare in practice |
| Class C(i) | Puisne mortgages | Equitable mortgages created after 1925 that are not protected by a deposit of title deeds |
| Class C(ii) | Limited owner's charge | Charge arising when a person under a disability or life tenant creates a mortgage |
| Class C(iii) | General equitable charges | Charges created by agreement that are not within any other class |
| Class C(iv) | Estate contracts | Contracts for the sale or creation of a legal estate |
| Class D(i) | Restrictive covenants (pre-1926) | Covenants entered into before 1 January 1926 |
| Class D(ii) | Restrictive covenants (post-1925) | Covenants entered into after 31 December 1925, not equitable easements |
| Class D(iii) | Equitable easements | Easements that are equitable rather than legal |
| Class E | Annuities | Various types of annuity affecting land |
| Class F | Matrimonial home rights | Rights of a spouse or civil partner under the Family Law Act 1996 |
A puisne mortgage is an equitable mortgage that is not protected by a deposit of title deeds. The most common example is a mortgage created by an agreement to mortgage (a contract to create a mortgage) that has not yet been completed by the execution of a legal mortgage. Because the mortgage is only equitable, the mortgagee should register it as a Class C(i) land charge to protect their interest against a subsequent purchaser.
An estate contract is a contract for the sale or creation of a legal estate in land. For example, a contract for the sale of unregistered land gives the purchaser an equitable interest under the doctrine of conversion (LPA 1925, s.40). The purchaser must register this as a Class C(iv) land charge to protect their interest. If they fail to do so, and the vendor sells the land to a third party, the purchaser's equitable interest is void against that third party.
Class F protects the rights of a spouse or civil partner who occupies the matrimonial home but is not the legal owner. These rights arise under the Family Law Act 1996 and give the non-owning spouse a right of occupation and certain other protections. The rights must be registered as a Class F land charge against the name of the legal owner. If not registered, the rights are void against a purchaser.
A purchaser of unregistered land should carry out a Form K search at the Land Charges Registry. This search is made against the name of the current estate owner (and any previous owners within the relevant period). The search will reveal any land charges registered against those names. The search result is a certificate that states whether any land charges are registered. The certificate is conclusive -- if no charge is revealed, the purchaser takes free of any unregistered charges.
A purchaser must search against ALL names under which the estate owner may have been known. This includes maiden names, married names, and any changes of name. Failure to search against a relevant name means the purchaser takes subject to any land charge registered under that name. The Land Charges Registry does not cross-reference names -- each name must be searched separately.
Under s.4 LCA 1972, a registrable land charge that is not registered is void against a purchaser of a legal estate for money or money's worth. "Void" means completely unenforceable -- the interest holder cannot enforce the interest against the purchaser at all. This is one of the strictest rules in property law. There is no discretion for the court to vary the result. If the charge is not registered, it is gone.
For the purposes of the LCA 1972, a purchaser is an actual purchaser in good faith for value of money or money's worth. This means the purchaser must: (1) actually acquire a legal estate in land (not merely a contract), (2) pay valuable consideration (not receive the land as a gift), and (3) act in good faith (not have actual knowledge of the unregistered charge). A donee (someone who receives the land as a gift) is not a purchaser and therefore takes subject to all unregistered charges.
In this Act, "purchaser" means a purchaser in good faith for valuable consideration and, in relation to a legal estate, means a purchaser of a legal estate for money or money's worth, including a chargee by way of legal mortgage. "Money or money's worth" includes marriage consideration but does not include a nominal consideration in money.
Mr and Mrs Green were the registered proprietors of a house. Mr Green forged Mrs Green's signature on a mortgage in favour of Midland Bank. The bank registered the mortgage but did not investigate whether Mrs Green had consented. The House of Lords held that the bank was not a purchaser in good faith because it had failed to make the standard enquiries that a reasonable purchaser would make. The bank had constructive notice of Mrs Green's rights.
An estate contract is a contract for the sale or creation of a legal estate in unregistered land. Under the doctrine of conversion (LPA 1925, s.40), once a contract for the sale of land has been signed, the purchaser becomes the equitable owner and the vendor holds the legal estate on trust for the purchaser. The purchaser's equitable interest is a Class C(iv) land charge and must be registered against the vendor's name.
The purchaser under an estate contract should register their interest as a Class C(iv) land charge as soon as possible after the contract is signed. If they fail to register and the vendor sells the land to a bona fide purchaser for value without notice, the purchaser's equitable interest is void against that purchaser. The purchaser loses their right to specific performance and can only claim damages against the vendor for breach of contract.
As soon as a contract for the sale of unregistered land is signed, the purchaser's solicitor should register the estate contract as a Class C(iv) land charge against the vendor's name. Delay can be fatal if the vendor attempts to sell to another purchaser in the meantime. Even a short delay could result in the loss of the purchaser's equitable interest.
Restrictive covenants affecting unregistered land may need to be registered as land charges. The class of registration depends on when the covenant was created: covenants created before 1 January 1926 are Class D(i), and covenants created after 31 December 1925 are Class D(ii). If the covenant is not registered, it is void against a purchaser for value of the land that is subject to the covenant.
The purchaser of unregistered land should carry out a Form K search against the name of the vendor to discover any restrictive covenants registered as Class D(i) or D(ii) land charges. The search result will reveal whether the land is subject to any registered restrictive covenants. If a covenant is discovered, the purchaser must decide whether the covenant is acceptable or whether it makes the property unsuitable for their purposes.
The doctrine of notice is a fundamental principle of equity. It provides that a purchaser of a legal estate in unregistered land takes subject to any prior equitable interests of which they have notice. Notice can be actual, constructive, or imputed. If the purchaser has no notice of the equitable interest, they take free of it (provided it is not a registrable land charge that has been registered). The doctrine operates alongside the Land Charges Act 1972.
The fundamental rule is stated in Pilcher v Rawlins (1872): "Where the equities are equal, the law prevails. Where the equities are not equal, the first in time prevails." This means that if the purchaser has notice of a prior equitable interest, the equitable interest takes priority (because the equities favour the earlier interest holder). If the purchaser has no notice, the purchaser takes free of the equitable interest (because the equities are equal and the legal estate prevails).
Actual notice means direct, positive knowledge of the existence of an equitable interest. The purchaser actually knows that the interest exists. This can arise from being told about the interest, reading about it in the documents, or seeing evidence of it on the land. Actual notice cannot be avoided -- if the purchaser knows about the interest, they are bound by it regardless of whether they carried out searches or made enquiries.
Constructive notice means that the purchaser is deemed to have notice of an interest that they would have discovered if they had carried out the proper investigations. Constructive notice arises in two main ways: (1) from the title deeds and documents -- if the interest would have been revealed by a proper examination of the title deeds, the purchaser has constructive notice; and (2) from inspection of the land -- if the interest would have been discovered by a reasonable inspection of the property.
This case established the rule that a purchaser is fixed with constructive notice of everything they would have discovered if they had made the usual and proper enquiries and inspections. The purchaser is expected to investigate the title documents, make pre-contract enquiries, and physically inspect the land. If the vendor or the occupiers refuse to answer enquiries, the purchaser is put on inquiry and must investigate further. Failure to do so means the purchaser has constructive notice.
A purchaser is expected to inspect the physical condition of the land before purchase. If the inspection would reveal evidence of an equitable interest (for example, a person in occupation who appears to be living there as an owner, or signs of a business being run from the property), the purchaser is fixed with constructive notice. The standard is what would be apparent to a reasonable person on a reasonable inspection.
Mrs Tizard was in actual occupation of the matrimonial home. Her husband mortgaged the property to Kingsnorth Finance without telling her. The bank did not make enquiries of Mrs Tizard. The Court of Appeal held that the bank had constructive notice of Mrs Tizard's interest because they should have made enquiries of the person in actual occupation. When an adult is living in the property, the purchaser must enquire as to the basis of their occupation. Failure to do so gives constructive notice.
Imputed notice means that notice of an interest known to one person (typically the purchaser's agent or solicitor) is attributed to the purchaser. If the purchaser's solicitor discovers an equitable interest during the conveyancing process, the purchaser is treated as having notice of that interest. The solicitor's knowledge is imputed to the client. Imputed notice applies regardless of whether the solicitor actually told the client about the interest.
The doctrine of notice and the Land Charges Act 1972 operate alongside each other. A registrable land charge that is not registered is void against a purchaser for value regardless of notice. A non-registrable equitable interest (e.g. a beneficial interest under a trust) binds a purchaser only if they have notice of it. For the SQE, you need to identify whether the interest is registrable or non-registrable, and then apply the appropriate rules.
Overreaching is the process by which the equitable interests under a trust of land are transferred from the land to the capital money paid on a disposition. When overreaching occurs, the purchaser takes the land free of the beneficial interests, and the beneficiaries' interests attach to the purchase money instead. The purpose of overreaching is to allow purchasers to buy land without investigating the beneficial interests behind the trust.
A conveyance to a purchaser of a legal estate in land shall overreach any equitable interests or powers affecting that estate. The equitable interests are transferred from the land to the capital money, and the purchaser takes the land free of those interests. Overreaching applies where the purchase money is paid to at least two trustees or a trust corporation.
Capital money arising under a trust of land or under the powers of the trustees must be paid to at least two trustees or a trust corporation. The trustees hold the capital money on trust for the persons entitled under the trust. If capital money is paid to a sole trustee, overreaching does not occur and the purchaser takes subject to the beneficial interests.
Overreaching only occurs if the purchase money is paid to at least two trustees or a trust corporation. This is the "two-trustee rule". If there is only one trustee and the purchase money is paid to that sole trustee, overreaching does not occur and the purchaser takes the land subject to all the beneficial interests under the trust. The two-trustee rule acts as a safeguard: it is unlikely that two trustees will both act fraudulently.
Overreaching occurs when: (1) there is a disposition of a legal estate in land (e.g. a sale or mortgage), (2) the land is subject to a trust of land, (3) the purchase money is paid to at least two trustees or a trust corporation, and (4) the trustees have the power to dispose of the land. When all these conditions are met, the beneficial interests are detached from the land and attach to the capital money. The purchaser takes free of the trust.
Overreaching fails if: (1) the purchase money is paid to a sole trustee (not a trust corporation), (2) the disposition is not of a legal estate (e.g. an assignment of an equitable interest), or (3) the trustees do not have the power to dispose of the land. If overreaching fails, the purchaser takes the land subject to the beneficial interests. The purchaser must then rely on the doctrine of notice or the Land Charges Act to determine whether those interests bind them.
Mr Boland mortgaged the matrimonial home to the bank without his wife's knowledge. Mrs Boland was in actual occupation and had a beneficial interest under a trust of land. Because there were two legal owners (Mr and Mrs Boland), the bank paid the mortgage money to Mr Boland alone. The House of Lords held that overreaching did not occur because the money was not paid to two trustees. Mrs Boland's interest was overriding and bound the bank.
Although the proportion of unregistered land is steadily decreasing, the rules of unregistered land remain relevant for several reasons. First, some land has never been registered and transactions involving it are still governed by the unregistered system. Second, first registration of previously unregistered land can raise issues about what interests are preserved or extinguished. Third, the SQE tests both registered and unregistered land rules as distinct topics.
A common SQE mistake is to apply registered land rules to unregistered land, or vice versa. Remember: the Land Charges Act 1972 and the doctrine of notice apply to unregistered land. The Land Registration Act 2002 and overriding interests (Sch 1 and Sch 3) apply to registered land. The question will usually tell you whether the land is registered or unregistered. If it does not, look for clues in the facts.